Saturday, May 25, 2013

Exemption from filing of Income Tax Return

What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?

The primary objective of this notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs.5,00,000, and (ii) the total income consists only of income chargeable to income tax under the head Salaries and interest income from savings bank account if such interest income does not exceed Rs.10,000.

Further, such salaried taxpayer would be eligible for exemption from filing a return of income only if tax liability has been discharged by the employer by way of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the Central Government. For this purpose, taxpayer has to intimate his interest

income to the employer during the course of the year.

For Example – (i) If an individual has salary income of Rs.4,90,000 and interest income from savings bank account not exceeding Rs.10,000 (which has been reported to the employer and tax has been deducted thereon), then the taxpayer would be exempt from the requirement of filing income-tax returns since the total income from both the above sources does not exceed five lakh rupees.

(ii) A taxpayer having salary income of Rs.4,98,000 and interest income from savings bank account of Rs.2,000 (which has been reported to the employer and tax has been deducted thereon), would also be eligible under this Scheme.

(iii) A taxpayer having salary income upto Rs.5,00,000 and nil interest income would also be eligible under this Scheme.

(iv) A taxpayer having salary income of Rs.5,50,000, interest income from savings bank account of Rs.8,000(which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs.70,000 under section 80C (on account of certain payments/investments/savings) would also be eligible under the Scheme.

(v) A taxpayer having salary income of Rs.6,10,000, interest income from savings bank account of Rs.10,000 (which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs.1,00,000 under section 80C (on account of certain payments/investments/savings), a deduction of Rs.20,000 under 80CCF (Infrastructure Bonds) and a further deduction of Rs.15,000 under section 80D (Health Insurance Premium) would also be eligible under the Scheme.